Leading Global Producer of Halloysite Clay

Dragonite™ for Controlled Release of Active Agents

Safe Harbor Statement and SEC Cautionary Note

Information provided and statements contained in this presentation that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended Section 21E of the Securities Exchange Act of 1934 as amended and the Private Securities amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such forward-looking statements only speak as of the date of this presentation and the Company assumes no obligation to update the information included in this presentation. Such forward-looking statements include information concerning our possible or assumed future results of operations, including descriptions of our business strategy. These statements often include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” or similar expressions. These statements are not guarantees of performance or results and they involve risks, uncertainties, and assumptions. For a further description of these factors, see Item 1A, Risk Factors, included within our Form 10-K for the year ended December 31, 2010, which was filed on April 15, 2011. Although we believe that these forward- looking statements are based on reasonable assumptions, there are many factors that could affect our actual financial results or results of operations and could cause actual results to differ materially from those in the forward- looking statements. All future written and oral forward-looking statements by us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to above. Except for our ongoing obligations to disclose material information as required by the federal securities laws, we do not have any obligations or intention to release publicly any revisions to any forward-looking statements to reflect events or circumstances in the future or to reflect the occurrence forward looking statements to reflect events or circumstances in the future or to reflect the occurrence of unanticipated events.

Cautionary Note to U.S. Investors - The United States Securities and Exchange Commission permits U.S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms on this website (or press release), such as “measured,” “indicated,” and “inferred” “resources,” which the SEC guidelines strictly prohibit U.S. registered companies from including in their filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 10-K which may be secured from us, or from our website at http://www.sec.gov/edgar.shtml. What is Dragonite™ Halloysite Clay?

FORMATION: Halloysite is formed naturally through the hydrothermal alteration of various types of rocks over the course of hundreds of millions of years. Conditions for its formation are uncommon and the resulting deposits easily eroded if unprotected during formation. As a result, commercially viable deposits are extremely rare.

PROPERTIES: Dragonite™ Halloysite Clay typically has a diameter smaller than 100 nanometers with lengths ranging from about 500 nanometers to over 1.2 microns. Halloysite as mined Traditional uses include fine china, advanced technical ceramics, fillers in paints and paper, food extenders, catalysts and molecular sieves.

3 Morphology of Kaolin and Halloysite

1. PLATY KAOLIN

2. STACKS OF KAOLINITIE

3. TUBULAR HALLOYSITE

4 Dragonite™ Crude Ore

5 Characterization of Halloysite

1. XRD - Mineralogy 2. XRF - Major element chemistry 3. ICP-MS – range of trace elements 4. FTIR 5. Surface area 6. Porosity 7. Brightness and colour, ISO 8. Particle size distribution 9. SEM and TEM – morphology 10. Full range of product evaluation

6 XRD Scans of 100% Halloysite, Kaolinite and Mixture

DRAGON 26 100% HALLOYSITE

NO MODULATION

GSL BULK 5 99.2% KAOLINITE

MODULATION

DRAGON 22 64% HALLOYSITE 36% KAOLINITE MODULATION

7 Carbon Nanotubes versus Dragonite™

Parameters Dragonite™ CarbonTubes Diameter / length 50 / 1000 nm 2 / 1000 nm Inner Lumen Diameter 15 nm 1 nm Biocompatibility Biocompatible Poisonous

8 Schematic Representation

15 nm

0.2 -1.0 µm 7 Å Oxygen 7 Å OH group Aluminium Dragon Mine, UT End on View of Kaolinite / Silicon Applied Minerals, Inc Dragonite™

Dragonite™ Halloysite Clay occurs in nature as hydrated mineral that has the formula

of Al2Si2O5(OH)4.2H2O which is similar to kaolinite except for the presence of an additional water monolayer between the adjacent layers. It forms by kaolinite layer rolling due to the action of hydrothermal processes.

9 Potential Applications of Dragonite™

1) Paint with anti-fouling properties where marine biocide was loaded. Delivery of herbicides, insecticides, fungicides and anti-microbials 2) Release of anticorrosion agents in protective coating 3) Plastic fillers (strength, self-healing) 4) Drug sustained release (cosmetics), food additives, fragrance 5) Use in advanced ceramic materials, bio-implants 6) Specific adsorbent (oil, ions), hydrogen storage 7) Templating nanoparticle synthesis and molecular sieves 8) Catalytic materials (hydrocarbon cracking)

10 Dragonite™ Microscopy Images

SEM TEM AFM

11 Dragonite™

0.5 TEM of composite with PMMA ]

-1 0.4 *g -1 *Å

3 0.3 cm -3 0.2 [10 V D 0.1

0.0 0 50 100 150 200 Pore diameter [nm] Zeta potential for Dragonite™ Halloysite Clay Pore size distribution of Dragonite™ lumen obtained from N2 (middle curve), silica (blue), and alumina (red) adsorption measurements analyzed with BET model nanoparticles 12 Dragonite™ - Biocompatible & “Green”

CLSM images of Dragonite™ (functionalised by APTES) intracellular uptake by HeLa cells. (Up) Hoechst- fluorescence of nuclei (blue) (left) and FITC-fluorescence (green) of Dragonite™ +APTES (right). (down) Transmission image of HeLa cells and (down) FITC Fluorescence Dragonite™+APTES and HeLa nuclei (blue) overlayed images (right). Applied Minerals Inc., Dragon Mine

Making Dragonite™ Tube Fluorescent With Aminopropyl Triethoxysilane-FITC

Trypan Blue test of Dragonite™ in HeLa (and MCF-7 tissue cells. % Cell Viability vs Dragonite™ concentration for 24-48-72 hours. It is much less toxic than usual table salt - NaCl (which kills cells at concentration of 5 µg/ml)

13 Release Profiles for Drug Loaded Into Dragonite™ in Water (10-hour release)

0.018 Unloaded Halloysite 0.016 Dexamethasone loaded Mercury porosimetry 0.014 halloysite of Dragonite™ 0.012 Halloysite Clay 0.010 unloaded and loaded 0.008 with drugs 0.006 Pore Volume in mL/g/nm 0.004

50 0.002 0.000 45 10 100 1000 Pore Diameter in nm 100 Brilliant Green 40

80 35

60 30

25

Release(%) 40 Dexamethasone from halloysite 20 Dexamethasone crystals % Release % Furosemide from halloysite 20 15 Furosemide crystals Nifedipine from halloysite 0 10 Nifedipine crystals 0 100 200 300 400 Dexamethasone Model Time (Min) 5 Nifedipine model Furosemide Model 0 0 1 2 3 4 5

Time in hr 14 Protein Loading / Release in Water

%Release of Urease from Halloysite 100 80 80 Insulin Halloysite Insulin crystal 60 60 40 40

% Release % 20 Release (%) 20 0 0 0 1 2 3 4 5 0 1 2 3 4 5 Time (hrs) Time in Hours

% Release of Peroxidase from Halloysite % Release ofCatalyse from Halloysite

80 100 60 80 60 40 40

% Release % 20 20 % Release % 0 0 0 5 10 15 20 -20 0 25 50 75 100 125 150 Time in hours Time in hours

Low charged at neutral pH insulin ( 2 nm diameter , pKa 7.1), urease ( 6 nm, pKa 6.2), and positive at neutral pH peroxidase (diameter ca 3.5 nm, pKa 8) show faster release than negative catalase (9 nm diameter, pKa 5.5), glucose oxidase (7 nm, pKa 4.2), and acetylcholinesterase (diameter ca 8 nm, pKa 5.5). 5-10 hours versus 100-150 hours 15 General Procedure for Preparation of Dragonite™ Halloysite Clay-Paint Composite for Corrosion Protection

Initial Halloysites Inhibitor Loading Washing

Nanocontainers in Hybrid Incorporation into Coating Polyelectrolyte Shell Assembly Coating

16 Dragonite™ in Paint Layer

Protective chemicals (corrosion inhibitors, antifouling agents) slowly release from the Dragonite™ tubes when cracks occurred

17 Benzotriazole Corrosion Inhibition Mechanism

Corrosion process is going on in the absence of corrosion inhibitor

Benzotriazole effectively stops copper from corrosion Structure of benzotriazole by forming protective layer on the surface of the metal iron (II) and copper benzotriazole complex

18 Self-Healing Coatings

Polyurethane paint after 6 month of exposure to 30g/L NaCl

Dragonite™-Paint composite, loaded with 8-hydroxyquinoline

Dragonite™-Paint composite, loaded with benzotriazole

19 Halloysite-Paint Composite Tensile Properties

Epoxy Polyurethane

2.5 0% halloysite 3 1% halloysite 2 2% halloysite 2.5 5% halloysite 0% 10% halloysite 2 1% 1.5 30% halloysite 2% 1.5 1 5% 10% 1 Stress (MPa) Stress 0.5 Stress (MPa) 0.5 0 0 0 5 10 15 20 25 30 0 10 20 30 40 50 Strain (%) Strain (%)

Halloysite is readily mixed with a variety of metal protective coatings, which is an important advantage. Above -stress-strain characteristics of halloysite-paint composites with different halloysite concentration.

20 Dragonite™-Paint Composite Surface Properties

100 Polyurethane 90 Polyepoxy 80 70 60 Contact angle Contact 50 40 0 2 4 6 8 10 Halloysite concentration (wt%)

Water contact angles on Dragonite™-paint composite surfaces

21 Paint Adhesion Test on 2024 Al Plate

Epoxy

Polyurethane

22 Paint Resistance to Rapid Deformation

7 A366 Fe alloy 6 2024 Al alloy

5

4

3

2 Deformation energy (J) Deformation energy 1

0 0 2 4 6 8 10 12 Halloysite concentration (%)

Epoxy samples after impact without (left) and with (right) 3% Dragonite™ loading. The Dragonite™ prevented cracking of the 23 epoxy material. Controlling Release Rates

• Release rate may be controlled by geometry of Dragonite™ Halloysite Clay (tubes with smaller internal diameters provide longer release). We operate with smallest 15 nm diameter lumen. • Rate can also be controlled through: formation of stoppers at tube endings, or with encapsulation of tubes by layer-by-layer (LbL) nanoassembly of polyelectrolytes (beginning with polycation complexation)

24 Benzotriazole Release from Halloysite in Water

(For Comparison- red curve dissolution of free non-encapsulated benzotriazole)

100 90 100 80 70 90 60 50 40

80 (%) Release 30 BTA release from 20 70 10 halloysite 0 60 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 BTA diffusion into water 50 Time (hrs) 40

Release(%) 30 20 10 0 0 10 20 30 40 50 Time (hrs)

25 Corrosion Inhibition Kinetics and Long Time Protection Through Sustained Triazoles Release

Blank

0.7

g) µ 0.6

Benzotriazole 0.5

0.4

Fresh water 0.3 2-mercapto- Salty water benzimidazole

0.2

0.1 2-mercapto- Benzotriazole mass ( Benzotriazole mass benzothiazole 0

0 3 6 9 12 15 18 21

Time (hrs) Kinetics of corrosion process, studied by tracking of the Cu(II) concentration in corrosive media

Kinetics of BTA deposition on Cu Copper strips were painted with polyurethane paint from top surface studied by QCM. Process side and acrylic latex paint from the back side and follows 1st order kinetics with the artificially scratched. Blank was painted with usual paint, constants of 0.012 and 0.0033 for others had Dragonite™ loaded with specified corrosion fresh and salty waters inhibitor and admixed with acrylic paint. Strips were respectively exposed to water containing 30 g/L NaCl. 26 Anticorrosion Copper Coating With Dragonite™-Benzotriazole

Two copper strips were painted with oil based blue (left) After 9 days of exposure and (right) after 35 paint (ECS-34 powder, blue, produced by Tru-Test days of exposure into corrosive liquid. manufacturing company) for corrosion resistance testing. Dragonite™ loaded with benzotriazole was Copper strips were painted with polyurethane mixed with paint before painting sample (A). Both of paint from top side and epoxy paint from the back the strips were artificially scratched and exposed to side and artificially scratched. Strip at (a) painted highly corrosive media containing 24 g/l NaCl, 3.8 g/ with usual paint while strip at (b) had Dragonite™ l CaCl2, and 2 g/L Na2SO4 for 10 days. loaded with benzotriazole admixed with epoxy paint. Strips were exposed to water containing After exposure , corrosive media was analyzed for Cu (II) 30 g/L NaCl. content. Copper in corrosive media were detected by UV- Vis spectrophotometer, and 120 ppm of copper ion was observed in the media where sample (B) was exposed while no copper was detected in the media of sample (A).

27 Formation of Coating / Stoppers Through Dragonite™ Rinsing in Aqueous Copper Ions

28 TEM With Elemental Analysis; Dragonite™ Coated with Cu-Benzotriazole Complex Layer

Nitrogen mapping Overlap mapping image Oxygen mapping (Nitrogen and Oxygen)

29 Dragonite™ Tubes As Containers for Anticorrosion Coating With Benzotriazole (Stoppers)

100 Blank 0.04 mM 80 0.4 mM 2.0 mM 60 4.0 mM Tube stopper formation 8.0 mM 40 20.0 mM Release (%) Release

20

0 0 120 240 360 480 Time (min)

Benzotriazole release with different stoppers at the tube ends

CCD images (top) and current density maps (bottom) of Al coated with sol-gel layer immersed in 0.1 NaCl after 0, 4.5 and 10 h; left- without Dragonite™, and right -doped with benzotriazole loaded Dragonite™

30 Encapsulation of Dragonite™ With LbL Assembly of Polyelectrolytes (e.g. Chitosan Complexation)

50 PEI 7 PEI 40 PEI PAA 6 30

20 Sample 1 5 10 Sample 2 4 PEI Sample 3 0 PAA Sample 4 3 1 2 3 4 5 6 -10 Sample 5 2 -20 Sample 6 Zeta potential (mV) potential Zeta PAA

-30 Layer thickness (nm) 1 PEI -40 PAA PAA PAA 0 PEI -50 1 2 3 4 5 6 7 Number of layers No of layer

Alteration of surface charge during LbL assembly as well as deposition of 7 nm SiO2 nanoparticles on Dragonite™ surface clearly indicates that the assembly was performed successfully. An average thickness of PEI/PAA bilayer is 2.2 nm. PEI - poly(ethyleneimine), PAA - poly(acrylic acid)

31 Epoxy Self-Healing with Hardener Loaded Dragonite™

SEM of fracture surfaces of 10 wt% Dragonite™- epoxy composite: (a) debonding and breakage of Dragonite™ and (b) pull-out of SEM of the fracture surfaces Dragonite™ of the composites with 3 wt% Dragonite™: (a) Dragonite™ debonding/ pull-out. (b) Dragonite™ bridging. Stress-strain (c) Dragonite™ fracture. relationships of Y. Ye, H. Chen, J. Wu, L. Ye, Dragonite™/ Polymer, vol. 48, 2007, pp. epoxy composites 6426–6433. prepared by adding Dragonite™ as a dry powder. Sample dimensions 17 x 8 x 0.6 mm and pulled with the speed of 0.6 mm/ min.

32 Antifouling, Antimolding Pain Doping With IPBC (Iodobutylpropyl Carbonate) Loaded Dragonite™

iodobutyl propyl carbonate

(a) Paint with inclusion of Dragonite™ containing an No Dragonite™ IMC loaded Dragonite™ antifouling agent. (b) Mold growth inhibition: number Fouling Exposure Panel 6 months, Tuticorin, of colonies vs days (blue, untreated; purple, treated India (Navel Research Lab experiment) growth media). 33 Nanotemplates for Synthesis and Storage of Materials

Cu Ka

Cu Kb

Synthesis without loading C and Cu signal arises from the TEM grid.

34 Conclusions

1. The capability of naturally occurring Dragonite™ Halloysite Clay as a container for protective agents (corrosion inhibitors, antifouling) was demonstrated. Inhibitors may be kept in such containers for a long time and released in the coating defect points within tens hours. Efficiency of paint doped with triazoles-Dragonite™ was demonstrated for copper, aluminum and iron protection.

2. Once loaded with protective agents, Dragonite™ Halloysite Clay can be modified by formation of stoppers at tube endings to extend release rates to hundreds hours.

3. Dragonite™ is mixable with variety of polymers and paints. Physical properties of Dragonite™ / paint composites were improved (strength).

4. 3-5% Dragonite™-polymer composites increase tensile strength for 30-50%; self- healing of the composites micro-cracks were demonstrated.

5. Synthesis of silver nanorodes in Dragonite™ lumen was performed.

35 Acknowledgements

♦ E. Abdullayev, LaTech

♦ H. Möhwald, D. Shchukin, Max Planck Inst, Potsdam, Germany

♦ K. Ariga, National Inst Materials Science, Tsukuba, Japan

The work was supported by Louisiana Board of Regents ITRS-2009 grants

36 References

1. Y. Lvov, D. Shchukin, H. Möhwald, “Clay Nanotubes for Controlled Release of Protective Agents” ACS Nano Journal, v.2, 814, 2008

2. D. Fix, H. Möhwald, Y. Lvov, D. Shchukin, “Application of Inhibitor Loaded Halloysite Nanotubes in Active Anticorrosive Coatings,” Adv. Functional Materials, v.19, 1720, 2009

3. E. Abdullayev, R. Price, D. Shchukin, Y. Lvov, “Halloysite Tubes as Nanocontainers for Anticorrosion Coating with Benzotriazole. ACS Appl. Materials & Interfaces, v.2, 1642, 2009

4. C. Yelleswarapu, E. Abdullayev, Y. Lvov, D. Rao, “Nonlinear optics of nontoxic clay nanotubes”, Optics Commun., v.283, 438, 2010

5. V. Vergaro, E. Abdullayev, Y. Lvov, A. Zeitoun, R. Cingolani, S. Leporatti, “Cytocompatibility and Uptake of Clay Nanotubes,” Biomacromolecules, v.11, 810, 2010.

6. Y. Suh, D. Kil, E. Abdullayev, Y. Lvov, “Natural Nanocontainer for Controlled Delivery of Glycerol as a Moisturizing Agent”, J. Nanoscience Nanotechn., v.10, in press, 2010.

7. E. Abdullayev, Y. Lvov, “Clay Nanotubes for Corrosion Inhibitor Encapsulation: Release Control with End Stoppers”, J. Mater. Chem., v.10, in press, 2010.

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